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CX - Excess amount of CENVAT credit reversed is not duty, therefore, provisions of Sec 11B not applicable - Assessee entitled to take suo motu credit - no requirement of filing refund claim: CESTAT

By TIOL News Service

MUMBAI, FEB 10, 2014: THE appellant noticed that they have reversed excess CENVAT credit of Rs.9,96,585/- during the period 05.09.1994 to 20.10.1994. Therefore, they suo motu took credit of the excess amount reversed by them.

Revenue found this out and issued a demand notice alleging that the appellant could not have suo motu taken the credit and ought to have followed the proper procedure of refund.

Both the lower authorities confirmed the demand and, therefore, the appellant is before the CESTAT.

The appellant submitted that re-credit was taken as they had debited excess CENVAT credit and it is doubted as to whether this act can be construed as taking suo motu credit warranting filing of a refund claim. They relied on the decisions in the case of Sopariwala Exports P. Ltd. - (2013-TIOL-1936-CESTAT-AHM) and Motorola India P. Ltd. - (2006-TIOL-168-CESTAT-BANG).

The Revenue representative insisted that the proper course of action was to file a refund claim under Section 11B of the CEA, 1944.

The Bench observed -

"7. It is no doubt that the appellant has reversed the excess amount which was required to be reversed by them. The excess amount reversed by them is not a duty. Therefore, in the light of the judicial pronouncement where the Hon'ble High Court of Karnataka held that any amount paid by mistake in excess, that amount cannot be termed as duty. Therefore, the provisions of section 11B of the Central Excise Act are not applicable. Further, in the case of Sopariwala Exports P. Ltd. (supra) wherein this Tribunal has held that duty paid twice is not duty. Therefore, assessee is entitled to take suomotu credit."

Holding that the credit of the excess amount paid by the appellant is not ‘duty' and, therefore, the provisions of section 11B of the CEA, 1944 are not applicable, the CESTAT set aside the order of the lower authority and allowed the appeal with consequential relief.

In passing: Also see 2014-TIOL-121-HC-MAD-CX

(See 2014-TIOL-203-CESTAT-MUM)


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